Aldi, A Retailer Actually Looking to Expand

Tue, 2009-01-13 14:33

Now, the U.S. arm of Aldi is cranking up expansion in Wal-Mart's home turf and seizing on the economic downturn to lure consumers to its Spartan stores and cheap groceries. The discount chain will open at least 75 U.S. stores this year, well above its typical pace, including its first Aldi store in New York City.

The company is counting on the economic downturn to crash a traditional barrier to the U.S. grocery business: Americans tend to be loyal to big-name brands.

Store-brand goods generally make up 22% of U.S. food sales in terms of unit volume, according to research by Nielsen Co., while in some European markets, they account for about 30%. At Aldi, 95% of the goods are the retailer's own brands.

Aldi's expansion shows how the tough economy is changing the competitive landscape across industries. Aldi first arrived in America in 1976 and began opening what has now become a collection of 1,000 U.S. stores, mostly in the Midwest and Northeast.